Robotic arms manufactured by Kuka AG operate on a Volkswagen Passat saloon chassis on the automated welding production line inside the VW factory in Emden, Germany. (Photographer: Krisztian Bocsi/Bloomberg)

Carmakers Fearing Retaliation Keep Pushing Against China Tariffs

(Bloomberg) -- Just because U.S. President Donald Trump’s proposed tariffs aren’t directly targeting cars and parts arriving from China doesn’t mean the threat is over.

Automakers are continuing to lobby Trump administration officials to minimize the tariffs, lest the Chinese government retaliate against their own efforts to expand in the world’s largest auto market.

“We recognize the issues the President is trying to address but there are better ways to go about this,” said John Bozzella, president and CEO of the Association of Global Automakers, based in Washington. “At the end of the day a trade war will hurt American producers and consumers.”

Trump has ordered sweeping tariffs on at least $50 billion in goods. For now the administration says the levies will focus on three industries -- aerospace, information and communication technology, and machinery -- areas where the U.S. government perceives the Chinese have been unfair or where there is a large trade deficit.

Automakers still have reason to worry. In his televised address, Trump used cars as an example of China’s unfairness by citing a 25 percent tariff on U.S. vehicles sold in China compared with only 2.5 percent on Chinese-made cars coming in. Trump also said he’s concerned about protecting U.S. technology. Carmakers build electric vehicles in China and share that technology with Chinese partners.

The U.S. has an $8.9 billion surplus on cars with the Chinese but a $1.5 billion auto trade deficit overall when counting parts, according to data from the U.S. Census bureau. The total trade deficit with China was at least $375 billion last year, with Trump pegging it closer to $500 billion.

“We encourage both governments to work together to resolve issues between these two important economies,” Ford Motor Co. said in a statement.

©2018 Bloomberg L.P.